April 28, 2024

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LS Eco Advanced Materials CEO Lee Sang-ho (left) and Erick Eschen, CEO of Vacuumschmelze, pose for a photo during a joint venture signing event held in Seoul on Feb. 14. (LS Cable)

LS Cable & System, through its subsidiary LS Eco Advanced Materials, has partnered with European magnet manufacturer Vacuumschmelze to create a joint venture aimed at making special magnets needed for electric vehicles.

Announced on Wednesday, this partnership will start producing 1,000 tons of neodymium permanent magnets annually by 2027, enough for half a million electric cars.

Neodymium permanent magnets are crucial for the motors that power electric cars, making this venture particularly significant as the world shifts towards more sustainable transportation options. Currently, the production of these magnets is dominated by a few companies outside of China.

LS Eco Advanced Materials specializes in EV engine parts like drive motor windings, or power coils, supplying them to Korean car manufacturers like Hyundai and Kia. This new venture is expected to further cement the company's role in the electric vehicle parts market by using its expertise to create a supply chain for these essential magnets.

“We're starting to supply neodymium this year and are looking into setting up a rare earth metal plant in Vietnam,” said Lee Sang-ho, CEO of LS Eco Advanced Materials and LS Eco Energy.

VAC, which stands for Vacuumschmelze, brings to the table nearly a century of experience in magnet production, with facilities in Germany, Finland, and a new factory being built in the United States in collaboration with General Motors. This partnership is part of a larger trend to find alternatives to Chinese-made components, ensuring a more diversified and secure supply chain for critical materials in the automotive industry.

The demand for neodymium magnets is on the rise, driven by the growing market for electric vehicles, wind power generators, and home appliances. Experts predict the demand will more than double by 2030, making the timing of this joint venture critical for meeting the increasing need for sustainable and efficient energy solutions.

“We are thrilled to join forces with LS Eco Advanced Materials, which has strong connections with Korean car manufacturers. This partnership opens up significant opportunities in the Asian market, including Korea,” said Erick Eschen, CEO of VAC.

By Moon Joon-hyun (mjh@heraldcorp.com)